There was much celebration last year when the city council enacted a record-high minimum wage. Much of the crowing openly celebrated the use of government's monopoly on the coercive use of force to redistribute wealth:
Well, how's that working out for ya?Celebrating the "win," another council member said this:"We forced the city establishment to lift the wages of 100,000 low wage workers in Seattle – to transfer $3 billion from business to workers at the bottom of the wage scale over the next 10 years. We did this. Workers did this."
The first face-plant scene in the compilation occurred in February, when a recreational gear manufacturer announced it was moving some operations to Nevada. The owners specifically stated that the new wage law was the sole reason for the change. As an aside and mentioning it may be unnecessary, it is probably not accidental that the relocation occurred in a state without an income tax.Let's go over the three main reasons why the minimum wage is a horrible idea:
Multiple additional sequences of the compilation were announced this week. A number of restaurants across the city have recently closed their doors, according to Shift Washington, a local political action group. They quote Seattle Magazinein attributing the wage hike as a "major factor" in the decision to cease operation.
A spokesman for the Washington Restaurant Association described the situation eatery owners are facing like this:
"Every [restaurant] operator I’m talking to is in panic mode, trying to figure out what the new world will look like."
The most current stage in the accident occurred this week with the filing of a lawsuit in the local federal district court. A franchise trade group and five local businesses are seeking a temporary injunction to stop the part of the law that applies to larger businesses. They assert that local franchisees, which the law treats as part of the larger national chains with which they are associated, are unfairly discriminated against. In econ-speak, this is known as "economically unproductive activity"; in regular-speak, it's known as "wasting time and money."
- It involves government telling a private organization how to conduct its affairs
- It distorts the market value of an hour's worth of labor
- It elbows the most economically vulnerable in our society out of the the market
I'll buy that. How do we slow or reverse income equality? Riding the market and getting something for nothing is not working, i.e., it's now all for the stockholder, not the worker. Corporations outsource stuff now to independent contractors who have all the liability and none of the benefits. What are we going to do about the march of the robots? They are gaining intelligence (artificial) and increasingly taking jobs from us year by year by year. The perfect worker, the robot.
ReplyDeleteWe don't worry about income inequality. We take the microeconomic view rather than the macro view. It's not important what your fellow citizen has in the way of assets or income.
ReplyDeleteArticle in the latest (dested, I know) New Yorker says you do:
ReplyDelete"What’s new about the chasm between the rich and the poor in the United States, then, isn’t that it’s growing or that scholars are studying it or that people are worried about it. What’s new is that American politicians of all spots and stripes are talking about it, if feebly: inequality this, inequality that. In January, at a forum sponsored by Freedom Partners (a free-market advocacy group with ties to the Koch brothers), the G.O.P. Presidential swains Ted Cruz, Rand Paul, and Marco Rubio battled over which of them disliked inequality more, agreeing only that its existence wasn’t their fault. “The top one per cent earn a higher share of our income, nationally, than any year since 1928,” Cruz said, drawing on the work of Saez and Piketty. Cruz went on, “I chuckle every time I hear Barack Obama or Hillary Clinton talk about income inequality, because it’s increased dramatically under their policies.” No doubt there has been a lot of talk."
Income inequality exists! Even your hero Cruz worries about it
Interesting conclusion arrived at in the article and you do know the US leads the developed democracies in the world in income equality. It lies with Congress:
ReplyDeleteStepan and Linz identified twenty-three long-standing democracies with advanced economies. Then they counted the number of veto players in each of those twenty-three governments. (A veto player is a person or body that can block a policy decision. Stepan and Linz explain, “For example, in the United States, the Senate and the House of Representatives are veto players because without their consent, no bill can become a law.”) More than half of the twenty-three countries Stepan and Linz studied have only one veto player; most of these countries have unicameral parliaments. A few countries have two veto players; Switzerland and Australia have three. Only the United States has four. Then they made a chart, comparing Gini indices with veto-player numbers: the more veto players in a government, the greater the nation’s economic inequality. This is only a correlation, of course, and cross-country economic comparisons are fraught, but it’s interesting.
Then they observed something more. Their twenty-three democracies included eight federal governments with both upper and lower legislative bodies. Using the number of seats and the size of the population to calculate malapportionment, they assigned a “Gini Index of Inequality of Representation” to those eight upper HOUSES, and found that the United States had the highest score: it has the most malapportioned and the least representative upper house. These scores, too, correlated with the countries’ Gini scores for income inequality: the less representative the upper body of a national legislature, the greater the gap between the rich and the poor.
The growth of inequality isn’t inevitable. But, insofar as Americans have been unable to adopt measures to reduce it, the numbers might seem to suggest that the problem doesn’t lie with how Americans treat one another’s kids, as lousy as that is. It lies with Congress. ♦
Cruz only worries about it to the extent that statist policies are responsible for it.
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